B.C. LNG project approved despite emissions, fracking

lngcanadakitimat1_160204Described as one of the largest infrastructure projects ever in Canada, a $40-billion liquefied natural gas project in northern British Columbia was approved on October 1, and the five investors – Royal Dutch Shell, Mitsubishi Corp., Malaysian-owned Petronas, PetroChina Co. and Korean Gas Corp. –  have stated that construction on the pipeline and a processing plant will begin immediately. According to the CBC report , the project is expected to employ as many as 10,000 people in its construction and up to 950 in full-time jobs. The processing plant will be located in Kitimat, which is within the traditional territory of the Haisla First Nation, and which is in favour of the project, as are the elected councils of 25 First Nations communities along the pipeline route.  The B.C. Federation of Labour also supports the project, as stated in its press release: “The Federation and a number of other unions have been part of the LNG process since 2013….As a part of the former Premier’s LNG Working Group, and the new government’s Workforce Development Advisory Group with First Nations and LNG Canada, labour pushed for many of the work force provisions that are reflected in today’s final investment decision”.

That leaves environmental activists in opposition. Although B.C.’s Premier announced the project with as “B.C.’s new LNG Framework to deliver record investment, world’s cleanest LNG facility”  , the project’s emissions will represent more than one-quarter of B.C.’s legislated targets for carbon pollution in 2050.  Both the Pembina Institute and Clean Energy Canada   note how difficult it will be to reach B.C.’s targets for clean growth (currently under a consultation process), and Pembina warns of the dangers of fracking and of methane emissions associated with natural gas.  Reflecting years of opposition, the Canadian Centre for Policy Alternatives wrote   “LNG is incompatible with B.C.’s climate obligations” (July 11). As far back as 2015, CCPA B.C. published  A Clear Look at B.C. LNG: Energy Security, Environmental Implications, and Economic Potential ,  by David Hughes.   An October 2  Maclean’s published an Opinion  piece, “Will LNG Canada increase greenhouse-gas emissions? It’s complicated.”  which considers (and rejects) the idea that B.C. LNG  might have a global benefit if it displaces coal use in China .

And finally, the issue of fossil fuel subsidies, which Canada and other G20 countries have promised to phase out.  In  “LNG Canada project called a ‘tax giveaway’ as B.C. approves massive subsidies” in The Narwhal,  author Sarah Cox reports that a senior B.C. government official “pegged the province’s total financial incentives for the project at $5.35 billion”, including break on the carbon tax, cheaper electricity rates, a provincial sales tax exemption during the project’s five-year construction period, and a natural gas tax credit.

The B.C. Green party, which has to date supported the current minority NDP government through a Confidence and Supply Agreement , maintains an online petition called  LNG is not worth it  . Green Party Leader Andrew Weaver issued this statement on October 1, expressing disappointment and stating:

“The government does not have our votes to implement this regime…..Despite our profound disappointment on this issue, we have been working closely in good faith with the government to develop a Clean Growth Strategy to aggressively reduce emissions and electrify our economy. The B.C. NDP campaigned to implement a plan to meet our targets and reaffirmed that promise in our Confidence and Supply Agreement. We will hold them to account on this. We will have more to say once that plan becomes public later this year.”

Updates: British Columbia’s New Climate Bureaucrat and LNG

Activists in B.C. are dismayed by the March 22 appointment of the person who will lead B.C.’s upcoming Climate Leadership Plan: see  “Fazil Mihlar, former Fraser Institute director, tapped as B.C.’s Deputy Climate Minister”  in the National Observer. Despite widespread public opposition – especially from the local group My Sea to Sky –  the Woodfibre LNG project was awarded federal approval, with conditions, on March 18 .  And in what is seen as a serious test of Canada’s climate commitment ,  Federal Minister McKenna has delayed the decision on the Pacific Northwest LNG project ; see “ Tensions tighten as Ottawa Prepares Decision on Pacific Northwest LNG”   in the Globe and Mail  or “Decision time for Trudeau: Climate Commitments or LNG legacy” in the  National Observer.  See also the Policy Note from the Canadian Centre for Policy Alternatives, “B.C. government spin cycle on LNG”  (March 15),   summarizing the results of freedom of information requests regarding natural gas supplies, environmental impacts, and economic benefits of developing LNG.     On a more positive note, Premier Clark announced funding of $11.9 million from the Province’s Innovative Clean Energy (ICE) Fund for three programs aimed at promoting clean-energy vehicles, clean air and clean water.   Details of the Clean Energy Vehicle Program are here  .

Recognition of First Nations’ Leadership to preserve the Environment

The Goldman Environmental Prize, the world’s largest international contest for grassroots environmental activism, was announced in April 2015. The North American winner was Marilyn Baptiste , an elected councillor and former chief of the 400-member Xeni Gwet’in First Nations, near Williams Lake, British Columbia. The award recognizes her leadership  in the fight against the Prosperity Mine which would have destroyed Fish Lake, a source of spiritual identity and livelihood for First Nations. Baptiste presented and prepared comprehensive environmental, cultural and economic data at federal environmental hearings. She also initiated a one-woman blockade in 2011 that prevented construction crews from reaching the proposed mine site.   Other winners are profiled at the Goldman Prize website.

The list to recognize all the efforts of Canada’s First Nations to protect our environment would be almost endless. Most recently, on May 14, the Lax Kw’alaams Nation rejected an offer of over $1-billion from Petronas LNG, in exchange for their consent to construction of an LNG export terminal on Lelu Island in the Great Bear Sea.   See the DeSmog blog or the WWF reactions . Meanwhile, the government of B.C. signed an agreement with Petronas LNG which will promote such ventures. Read the Globe and Mail article, “ B.C. pushing ahead with LNG proposal despite Objections from First Nations” (May 20).

B.C. LNG Setor: New Legislation and a New Report

In the week of October 20, British Columbia introduced the Greenhouse Gas Industrial Reporting and Control Act and the Liquefied Natural Gas Income Tax Act. The former requires liquefied natural gas plants to purchase carbon offsets and punishes those who fail to limit their carbon emissions to 0.16 tonnes per tonne of LNG – the strictest standards in the world, according to B.C. Environment Minister Mary Polak.

However, Merran Smith of Clean Energy Canada criticized the Act for focussing exclusively on port facilities, at the end of the supply chain. Matt Horne of the Pembina Institute asserted that 70% of the industry’s emissions would be released before reaching the ports. See “B.C.’s New LNG Emissions Regulations A Good Start, But Not Enough” from Desmog Canada at: http://www.desmog.ca/2014/10/22/bc-new-lng-emissions-regulations-good-start-but-not-enough, and Pembina’s comments at: http://www.pembina.org/media-release/pembina-reacts-to-tabling-of-bc-lng-carbon-pollution-legislation.

The new tax legislation imposes a 3.5% rate on operating income, half the amount B.C. had initially planned. Read the government press release at: http://www.newsroom.gov.bc.ca/2014/10/bc-to-have-worlds-cleanest-lng-facilities.html, and for details on the Act, see the government’s website at: http://www2.gov.bc.ca/gov/topic.page?id=75BD4BF2B6B5493FB8A36DB05EBA764D. Jack Mintz, from the University of Calgary, states: “the B.C. shale gas royalty is one of the most distortionary systems developed in industrialized countries”.

For his financial and policy critique, see “Jack M. Mintz: Why B.C.’s LNG tax policy sets a bad precedent” in the Financial Post at: http://business.financialpost.com/2014/10/22/jack-m-mintz-why-b-c-s-lng-tax-policy-helps-neither-the-province-nor-the-industry/. For a broader view, see Marc Lee’s reaction in “A B.C. Framework for LNG, part 2: The LNG income tax” at Rabble.ca at: http://rabble.ca/blogs/bloggers/policynote/2014/10/bc-framework-lng-part-2-lng-income-tax.

And the last word: Pembina will release a new report on October 27th, LNG and Climate Change: The Global Context.

Nova Scotia Bans Onshore Fracking; Explores Energy Options

Following a two-year moratorium and the release of the report of a 10-person expert panel chaired by Cape Breton University president David Wheeler, Nova Scotia announced its decision to prohibit onshore high-volume fracking on September 3rd. The ban does not include less risky onshore extraction methods or offshore high-volume fracking.

Nova Scotia’s offshore oil and gas reserves are significantly larger and have already attracted $2 billion in investments and proposals to build three LNG plants. The South Canoe wind project, currently under construction, and a tidal turbine to be built next year will further buttress the province’s energy resources.

Consultations with the public and Mi’kmaq communities revealed a strong mistrust of fracking. See the website of the Hydraulic Fracturing Review at: http://www.cbu.ca/hfstudy, with links to submissions, studies and press coverage. See also “High-volume fracking to be banned in Nova Scotia” available at the CBC at: http://www.cbc.ca/news/canada/nova-scotia/high-volume-fracking-to-be-banned-in-nova-scotia-1.2754439.

On the heels of the announcement, a study released by the US National Institute for Occupational Safety and Health found that some fracking workers are exposed to unsafe volumes of benzene when inspecting storage tanks. “Evaluation of Some Potential Chemical Exposure Risks During Flowback Operations in Unconventional Oil and Gas Extraction: Preliminary Results” is available at: http://www.tandfonline.com/doi/full/10.1080/.VBDknKOuRas#.VBySDmOln4U, summarized in the Los Angeles Times at: http://www.latimes.com/science/sciencenow/la-sci-sn-fracking-benzene-worker-health-20140910-story.html#page=1.